For every system in place, there is someone trying to circumvent it. Unfortunately, the rental-housing industry is not immune, as fraudsters aim to pinpoint any loopholes and exploit them for personal gain.
Whether it’s to qualify for an apartment home, steal personal information of renters or sneak pets into a property without paying fees, rental-housing teams face a bevy of potentially fraudulent activity on a daily basis.
Here is a look at some of the most common types of fraud in the industry, along with some of the telltale warning signs. Thankfully, tech is available to help short-circuit the efforts of these scamsters.
If you’re a good-hearted, honest individual, here’s some advice: don’t Google “fake paystubs.” Unfortunately, a gaggle of websites are dedicated to creating paystubs that appear to be authentic. Potential renters who otherwise wouldn’t qualify for an apartment home sometimes resort to this tactic to make it appear like they make more money than they actually do. The ramifications can be significant for operators, as these renters are more likely to become delinquent and result in high-cost evictions, collections and turnover efforts.
When the place of employment itself is difficult to verify through a cursory search, that can signify that something isn’t right. The industry is working to conquer this trend, as technology has been developed to instantly verify bank account information and further vet any financial documentation.
Fraudulent support animal documentation
While scores of websites might not be dedicated to it like they are to paystubs, those seeking a fabricated health care provider’s letter that verifies a support animal, like an ESA, won’t have to look far. Individuals who resort to this tactic are often looking to escape pet rent, as communities cannot charge for a verified assistance animal.
Others are merely trying to sneak a restricted breed into a rental home under the guise of an assistance animal. These individuals are often amenable in paying regular pet rent, but don’t have that option if their pet is on a restricted list (usually breed- or weight-related). Community-induced restrictions don’t pertain to service and support animals, so these renters figure this might be the only way they can keep their pet. That is one of the many reasons why shedding blanket breed and weight restrictions in favor of a per-case evaluation makes sense, but that’s a topic for another time.
Anyhow, few onsite team members are experts in the nuances surrounding reasonable accommodation requests for assistance animals, and it can be stressful and time-consuming to verify the related documentation. Thankfully, third-party services are available that can handle that part of it for rental communities, in which a team of experts can be leaned on to review the request and help make the determination.
Synthetic ID/application fraud
Synthetic ID occurs when parts of real information and fake information are combined to develop an identity. This makes the fraudulent ID difficult to pinpoint, because certain components of the identity can be verified. Scamsters might use an authentic name but the social security number of a deceased individual, or vice versa. They will contort family names and employment histories to forge a semi-authentic identity. If these bad actors are successful in their application fraud efforts, they’ll often stay at an apartment community for several months, skip out on paying until they officially become delinquent and then disappear. Because their identity is fake, they cannot be tracked down.
Fortunately, advanced identification verification software is becoming increasingly more accurate and lessens the chances that any of these fraudsters make it into a rental home.
This is certainly not an exhaustive list of the types of potential fraud in the industry, as some scammers aren’t merely trying to work their way into a home. Some are targeting sensitive information, such as personal information of renters or financial information of vendors. The silver lining is that cybersecurity resources and third-party outlets are becoming more robust and can help the industry combat the several types of fraud it experiences on a regular basis.
Source: Multifamily Insiders
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